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H1 Taxes | 12 Months Ended
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Dec. 31, 2024
Major components of tax expense (income) [abstract] |
H1 Taxes |
|  | Taxes
The Company’s tax expense was SEK –2,215 (–2,785) million or 85.6% (–11.9 %) of income after financial items. The tax rate may vary between years depending on business and geographical mix. Income taxes recognized in the income statement
|  | 2024 |  |  | 2023 |  |  | 2022 |
Current income taxes for the year |  |  | –6,461 |  |  |  | –4,289 |  |  |  | –7,353 |
Current income taxes related to prior years |  |  | –162 |  |  |  | 118 |  |  |  | 253 |
Deferred tax income/expense (+/–) |  |  | 4,563 |  |  |  | 1,406 |  |  |  | 1,617 |
Share of taxes in associated companies |  |  | –102 |  |  |  | –20 |  |  |  | –14 |
Pillar Two tax expense |  |  | –53 |  |  |  | – |  |  |  | – |
Income tax expense |  |  | –2,215 |  |  |  | –2,785 |  |  |  | –5,497 |
A reconciliation between reported tax expense for the year and the theoretical tax expense that would arise when applying the statutory tax rate in Sweden, 20.6%, on the consolidated income/loss before taxes, is shown in the table below. The tax rate is negatively impacted by the effect on non-tax deductible goodwill and the remeasurement of tax loss carry-forwards and positively impacted by the other intangible asset impairments mainly related to Vonage of SEK 15.1 (31.9) billion. In 2022 taxes were positively impacted by SEK 411 million as a result of utilization of previously expensed withholding tax assets in Sweden and negatively impacted by the tax effect of the provision for the Department of Justice (DOJ) settlement of SEK 450 million. Reconciliation of Swedish income tax rate with effective tax rate
|  | 2024 |  |  | 2023 |  |  | 2022 |
Calculated tax expense at Swedish tax rate of 20.6% |  |  | –533 |  |  |  | 4,804 |  |  |  | –5,070 |
Effect of foreign tax rates |  |  | 430 |  |  |  | –884 |  |  |  | –605 |
Current income taxes related to prior years |  |  | –162 |  |  |  | 118 |  |  |  | 253 |
Remeasurement of tax loss carry-forwards |  |  | –973 |  |  |  | –28 |  |  |  | –49 |
Remeasurement of deductible temporary differences |  |  | 308 |  |  |  | 394 |  |  |  | 15 |
Withholding tax expense |  |  | –780 |  |  |  | –217 |  |  |  | – |
Recognition of previously expensed withholding tax |  |  | – |  |  |  | – |  |  |  | 411 |
Tax effect of non-deductible expenses |  |  | –1,045 |  |  |  | –7,311 |  |  |  | –760 |
Tax effect of non-taxable income |  |  | 655 |  |  |  | 335 |  |  |  | 327 |
Tax effect of changes in tax rates |  |  | –62 |  |  |  | 4 |  |  |  | –19 |
Pillar Two tax expense |  |  | –53 |  |  |  | – |  |  |  | – |
Income tax expense |  |  | –2,215 |  |  |  | –2,785 |  |  |  | –5,497 |
Effective tax rate |  |  | 85.6% |  |  |  | –11.9% |  |  |  | 22.3% |
The Group has applied the temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12. Accordingly, the Group neither recognises nor discloses information about any deferred tax assets or liabilities related to Pillar Two income taxes. Deferred tax balances Deferred tax assets and liabilities are derived from the balance sheet items as shown in the table below. The table includes the effect of the IAS 12 amendments on deferred tax arising from a single transaction effective January 1, 2023. Tax effects of temporary differences and tax loss carry-forwards
|  | Deferred tax assets |  |  | Deferred tax liabilities |  |  | Net balance |
2024 |  |  |  |  |  |  |  |  |  |  |  |
Intangible assets and property, plant and equipment |  |  | 1,447 |  |  |  | 3,457 |  |  |  |  |
Right-of-use assets and similar assets |  |  | – |  |  |  | 1,199 |  |  |  |  |
Current assets |  |  | 4,340 |  |  |  | 1,323 |  |  |  |  |
Post-employment benefits |  |  | 4,778 |  |  |  | 229 |  |  |  |  |
Provisions |  |  | 4,788 |  |  |  | – |  |  |  |  |
Lease liabilities and similar liabilities |  |  | 1,307 |  |  |  | – |  |  |  |  |
Deferred tax credits |  |  | 5,027 |  |  |  | – |  |  |  |  |
Other |  |  | 2,394 |  |  |  | 359 |  |  |  |  |
Loss carry-forwards |  |  | 5,603 |  |  |  | – |  |  |  |  |
Deferred tax assets/liabilities |  |  | 29,684 |  |  |  | 6,567 |  |  |  | 23,117 |
Netting of assets/liabilities |  |  | –5,272 |  |  |  | –5,272 |  |  |  |  |
Deferred tax assets/liabilities, net |  |  | 24,412 |  |  |  | 1,295 |  |  |  | 23,117 |
2023 |  |  |  |  |  |  |  |  |  |  |  |
Intangible assets and property, plant and equipment |  |  | 1,195 |  |  |  | 7,193 |  |  |  |  |
Right-of-use assets and similar assets |  |  | – |  |  |  | 1,272 |  |  |  |  |
Current assets |  |  | 3,413 |  |  |  | 1,313 |  |  |  |  |
Post-employment benefits |  |  | 5,297 |  |  |  | 477 |  |  |  |  |
Provisions |  |  | 3,980 |  |  |  | – |  |  |  |  |
Lease liabilities and similar liabilities |  |  | 1,337 |  |  |  | – |  |  |  |  |
Deferred tax credits |  |  | 5,453 |  |  |  | – |  |  |  |  |
Other |  |  | 2,095 |  |  |  | 178 |  |  |  |  |
Loss carry-forwards |  |  | 6,158 |  |  |  | – |  |  |  |  |
Deferred tax assets/liabilities |  |  | 28,928 |  |  |  | 10,433 |  |  |  | 18,495 |
Netting of assets/liabilities |  |  | –6,553 |  |  |  | –6,553 |  |  |  |  |
Deferred tax assets/liabilities, net |  |  | 22,375 |  |  |  | 3,880 |  |  |  | 18,495 |
Changes in deferred taxes, net
|  | 2024 |  |  | 2023 |
Opening balance, net |  |  | 18,495 |  |  |  | 14,610 |
Recognized in net income |  |  | 4,563 |  |  |  | 1,406 |
Recognized in other comprehensive income |  |  | 505 |  |  |  | –631 |
Balances regarding acquired/divested busines s es |  |  | – |  |  |  | –57 |
Deferred tax credits increase (+) / utilization (–) |  |  | –685 |  |  |  | 3,249 |
Translation difference |  |  | 239 |  |  |  | –82 |
Closing balance, net |  |  | 23,117 |  |  |  | 18,495 |
Tax on items charged to Equity and Other comprehensive income
|  | 2024 |  |  | 2023 |  |  | 2022 |
Remeasurements of defined benefits pension plans |  |  | –147 |  |  |  | –251 |  |  |  | –2,093 |
Revaluation of credit risk on borrowings |  |  | 117 |  |  |  | 137 |  |  |  | –212 |
Cash flow hedge reserve s |  |  | 652 |  |  |  | –380 |  |  |  | –671 |
Non-controlling interests |  |  | 2 |  |  |  | – |  |  |  | –4 |
Total |  |  | 624 |  |  |  | –494 |  |  |  | –2,980 |
Tax on items charged to Equity and Other comprehensive income (OCI) is presented in the table above. Of the total tax effect reported in OCI, SEK 507 (–631) million is deferred tax and SEK 117 (137) million is current tax. As a result of Parent Company exemptions from tax on dividends from subsidiaries and on capital gains on disposal, there are no significant taxable temporary differences associated with investments in subsidiaries, branches and associates. Tax loss carry-forwards Significant tax assets regarding tax loss carry-forwards are reported to the extent that realization of the related tax benefit through future taxable profits is probable also when considering the period during which these can be utilized, as described below. The majority of the recognized tax loss carry-forwards pertain to Sweden, US, Germany and Brazil. These countries have long or indefinite periods of utilization. Of the total SEK 5,603 (6,158) million recognized deferred tax assets related to tax loss carry-forwards, SEK 3,815 (4,172) million relates to Sweden. Future profit projections support the conclusion that the deferred tax assets will be utilized in the foreseeable future. As of December 31, 2024, the recognized tax loss carry-forwards amounted to SEK 25,354 (27,666) million. The tax value of the tax loss carry-forwards is reported as a tax asset based on the utilization periods and the expectation that the G roup will realize a significant taxable income to offset these loss carry-forwards. The tax loss carry-forwards of SEK 11,025 (8,918) million at a tax value of SEK 2,399 (1,819) million have not been recognized due to judgments that they are unlikely to be utilizable against future taxable profits in the respective jurisdictions. The majority of both recognized and unrecognized tax loss carry-forwards have an expiration date in excess of five years. The majority of unrecognized tax loss carry-forwards pertains to US, Ireland, Hungary and the UK. The final years which the recognized and unrecognized tax loss carry-forwards can be utilized are shown in the following table. Tax loss carry-forwards
|  | Recognized tax loss |  |  |  |  |  | Unrecognized tax loss |
Year of expiration |  | Tax loss carry-forwards |  |  | Tax value |  |  |  |  |  | Tax loss carry-forwards |  |  | Tax value |
2025 |  |  | 58 |  |  |  | 10 |  |  |  |  |  |  |  | 136 |  |  |  | 19 |
2026 |  |  | 2 |  |  |  | 1 |  |  |  |  |  |  |  | 160 |  |  |  | 26 |
2027 |  |  | 10 |  |  |  | 2 |  |  |  |  |  |  |  | 1,331 |  |  |  | 327 |
2028 |  |  | 59 |  |  |  | 15 |  |  |  |  |  |  |  | 450 |  |  |  | 107 |
2029 |  |  | 300 |  |  |  | 85 |  |  |  |  |  |  |  | 118 |  |  |  | 16 |
2030 or later (also includes unlimited carry-forwards) |  |  | 24,925 |  |  |  | 5,490 |  |  |  |  |  |  |  | 9,052 |  |  |  | 1,960 |
Total |  |  | 25,354 |  |  |  | 5,603 |  |  |  |  |  |  |  | 11,247 |  |  |  | 2,455 |
Deferred tax credits In addition to deferred tax credits of SEK 5,027 (5,453 ) million recognized in 2024, unused deferred tax credits, relating mainly to R&D tax credits, for which no deferred tax asset was recognized in the consolidated balance sheet amounted to SEK 1,114 (1,148) million. The final years in which the tax credits can be utilized are shown in the below table. Risk assessment on the business plans is carried out on a regular basis, and deferred tax asset recoverability analysis will be performed if conditions suggest that such assets might need to be impaired. Deferred tax credits
|  | Recognized deferred tax credits |  |  | Unrecognized deferred tax credits |
Year of expiration |  | Tax value |  |  | Tax value |
2025 |  |  | 32 |  |  |  | 108 |
2026 |  |  | 121 |  |  |  | 122 |
2027 |  |  | 33 |  |  |  | 105 |
2028 |  |  | 1,376 |  |  |  | 9 |
2029 |  |  | 2,132 |  |  |  | 10 |
2030 or later |  |  | 1,333 |  |  |  | 760 |
Total |  |  | 5,027 |  |  |  | 1,114 |

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